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People also ask
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What is the method of ascertaining actual cost?
Actual costs can be ascertained in two ways: first, post costing; and second, concurrent or continuous costing. Under this system, costs are ascertained after production is completed. This is achieved by analyzing financial data in such a way as to disclose the cost of the units that have been produced.
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What is the technique of cost?
Costing techniques are methods for ascertaining cost-for-cost control and decision-making purposes. They can be applied to make-or-buy decisions, negotiation, price appraisal and assessing purchasing performance (Lysons & Farrington, 2006).
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What is the cost analysis technique?
A cost-benefit analysis (CBA) is a process of comparing the projected costs and benefits of a decision to determine its feasibility. Businesses can determine whether a decision is worthwhile by summing up the potential rewards expected from an action and subtracting the associated costs.
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What is the actual cost technique?
The technique of using actual cost data (or extrapolating future costs from actual costs) is based on data from earlier/previous units, prototypes, or production lots of the same system (not a similar system, as in the analogy method).
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What is the specific cost technique?
Specific is a cost flow method that ties the item's cost directly to the location/lot combination where the item received is posted. An item is issued from inventory at the cost tied to the specific location/lot combination.
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What is the process of accounting for cost called?
Cost accounting is a form of managerial accounting that aims to capture a company's total cost of production by assessing all of its variable and fixed costs. Cost accounting is not compliant with generally accepted accounting principles (GAAP); this accounting method is only used by businesses for internal purposes.
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What is the process costing technique?
With process costing, companies determine item cost by tracking the cost of each stage in the production process, instead of tracking costs for each individual item. After adding up the cost of all the steps in the process, they divide the total cost by the number of items. This is called the cost per unit.
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What is the cost based technique?
Cost-based pricing is a pricing method that is based on the cost of production, manufacturing, and distribution of a product. Essentially, the price of a product is determined by adding a percentage of the manufacturing costs to the selling price to make a profit.
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